College athletes are no more employees than grandmothers are bicycles

On May 12th, the National Labor Relations Board (NLRB) released a notice and invitation to file briefs related to the issue of Northwestern University football players being deemed employees by Region 13 of the NLRB. The parties to the case and other interested parties have until June 26th to submit their thoughts on a number of different questions set forth by the board.

Fields of Green featured contributor Richard Buckley, a partner in the Los Angeles office of Arent Fox LLP, provides an argument that addresses one of the main issues the board and brief submitters will be considering.

On March 26, 2014, Region 13 of the National Labor Relations Board announced its controversial decision that football players receiving scholarships from Northwestern University are “employees” under the National Labor Relations Act (NLRA) who have the right to vote on whether to unionize. That decision has been appealed to the Board in Washington D.C.

The ruling applies a broad, common law definition of employee: “a person who performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.” The rationale used to arrive at the conclusion that Northwestern football players are employees under the common law definition calls to mind the old joke, “[i]f my grandmother had wheels, she’d be a bicycle.”

First, the ruling equates athletic tenders with employment contracts, noting that even though “the players do not receive a paycheck in the traditional sense, they nevertheless receive a substantial economic benefit for playing football.” If this is indeed the case, one could argue that these football players are not amateurs under NCAA Bylaws and are, thus, ineligible. Second, the ruling likens traditional coaching and discipline to “Employer’s Control” without regard for the myriad implications of having the practice/playing field treated as a workplace. Quick question: would running laps for a minor team rule infraction be treated as an adverse employment action that could lead to an invocation of grievance procedures under a collective bargaining agreement?

In reviewing this issue on appeal, the Board should consider the case of Shephard v. Loyola Marymount University (2002) 102 Cal.App.4th 837. In Shephard, a student athlete sought remedies under the Fair Employment and Housing Act (“FEHA”) for alleged racial discrimination arising out of the university’s refusal to renew her athletic scholarship. At issue in the case was whether Ms. Shephard was an “employee” of the school under FEHA. The California Court of Appeal found she was not.

As with the NLRA, FEHA’s definition of employee was vague. The Shephard Court drew upon cases interpreting California workers’ compensation and public entity liability laws, noting that the California Labor Code specifically excludes collegiate, scholarship athletes from the definition of employee. The Court referred to Townsend v. State of California, an earlier case in which a court found that a student athlete who had struck an opposing player during a college basketball game was not a state employee, and noted that, per Townsend, the student athlete’s receipt of a scholarship was irrelevant to the analysis: “[t]hus, conceptually, the colleges and universities maintaining these athletic programs are not in the ‘business’ of playing football or basketball any more than they are in the ‘business’ of golf, tennis, or swimming. Football and basketball are simply part of an integrated multisport program which is part of the education process. Whether on scholarship or not, the athlete is not ‘hired’ by the school to participate in interscholastic competition.”

The Shephard Court also observed that Ms. Shephard’s financial aid agreements incorporated by reference the NCAA constitution and bylaws, which set forth the NCAA’s amateurism requirements. In addition, the Court took into account the fact that both state and federal tax codes excludes “qualified scholarships” from gross income; to Region 13 in the Northwestern University case, the fact that scholarships were not treated as taxable income by the university was “not dispositive of whether it is compensation.”

Most importantly, the Shephard Court acknowledged the absurd and unreasonable results of holding Ms. Shephard to be an employee under some laws but not others. The mind boggles when considering the myriad ways in which a student athlete could be an employee for some purposes, but not for others, under the laws of the various states if the Northwestern University ruling is upheld on appeal (including California, where student athletes are specifically excluded from the definition of employee under the California Labor Code).

Expanding the protections of college athletes is worthy of serious discussion; however, declaring students to be employees of the universities they attend may lead to unintended, adverse consequences to athletes and universities alike. Alumni may rethink donations to college athletic programs if such programs become (and are treated as) professional sports ventures. Likewise, certain corporations may choose to redirect sponsorship dollars away from college sports if they become divorced from academics and amateurism and if viewer demographics and pricing change. Putting aside potential revenue shortfalls, collective bargaining is costly, time consuming, and can lead to work stoppages and lockouts. What’s more, if universities are forced through collective bargaining to pay a fixed amount of compensation above tuition to unionized student athletes, rising costs may result in deep cuts in other sports.

College football players are no more employees than grandmothers are bicycles. Solutions to the concerns raised by Northwestern football players should not to be found in quasi-judicial abstractions but should result from good faith negotiation and compromise. Student athletes may never have greater leverage than at present.

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Richard Buckley is a partner in the Los Angeles office of Arent Fox LLP. He represents venues, clubs and other sports-related entities, and he has successfully litigated disputes for a number of sports industry clients. He can be reached at richard.buckley@arentfox.com. Views expressed are the personal views of the author and do not represent the views of Arent Fox LLP, its partners, employees or its clients. Furthermore, the information provided by the author is not intended to be legal advice and does not create an attorney-client relationship. Bio